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of <h1>Hostel accommodation services don't qualify for GST exemption under residential dwelling provisions, attract 18% GST rate</h1> <h3>IN RE : Tvl. J.K. Ladies Hostel</h3> IN RE : Tvl. J.K. Ladies Hostel - TMI Issues Involved:1. Eligibility of hostel accommodation for GST exemption under specific notification entries.2. Requirement for GST registration based on turnover.3. Applicable GST tariff heading and rate for hostel accommodation services.4. Taxability of in-house food supply as part of composite service.5. Scope of advance ruling under Section 97(2) of the GST Act.Issue-wise Detailed Analysis:1. Eligibility of Hostel Accommodation for GST Exemption:The primary issue was whether the hostel accommodation provided by the applicant qualifies for GST exemption under Entry 12 of Exemption Notification No. 12/2017-CT (Rate) dated 28.06.2017. The key question was whether the accommodation qualifies as a 'residential dwelling for use as residence.' The judgment clarified that the term 'residential dwelling' is not defined under the CGST Act, but typically refers to a place used as a home, without including amenities like food or housekeeping. The applicant's hostel, offering accommodation with additional services like food and housekeeping, was deemed more akin to a commercial establishment rather than a residential dwelling. Therefore, it did not qualify for the exemption.2. Requirement for GST Registration:Since the applicant's service of providing hostel accommodation is not exempt, it constitutes a 'supply' under Section 7(1)(a) of the CGST Act. Therefore, if the applicant's aggregate turnover exceeds twenty lakh rupees in a financial year, they are required to register for GST under Section 22 of the GST Acts.3. Applicable GST Tariff Heading and Rate:The supply of hostel accommodation services falls under Tariff heading 9963, which pertains to 'Accommodation, food and beverage services.' The applicable GST rate is 9% CGST plus 9% SGST, as per Sl.No. 7(vi) of Notification No. 11/2017, Central Tax (Rate), dated 28.06.2017, as amended.4. Taxability of In-house Food Supply as Part of Composite Service:The supply of in-house food to hostel inmates was considered part of a composite supply, where the principal supply is the hostel accommodation service. According to Section 8 of the CGST Act, the tax rate applicable to the principal supply (hostel accommodation) applies to the composite supply. Therefore, the composite supply, including food, is taxable at 18%.5. Scope of Advance Ruling Under Section 97(2) of the GST Act:The fifth question raised by the applicant did not fall within the scope of Section 97(2) of the GST Act, and thus, no ruling was issued on that question.Ruling:1. The hostel accommodation services provided by the applicant are not eligible for GST exemption under the specified notification entries.2. The applicant must register for GST in Tamil Nadu if their annual turnover exceeds twenty lakh rupees.3. The applicable tax rate for hostel accommodation services is 18% (9% CGST + 9% SGST).4. The supply of in-house food is part of a composite service, taxable at 18%.5. No ruling was issued for the fifth question as it was outside the scope of the advance ruling provisions.
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